Mgt 485
Chapter 09
Strategic Planning
Irwin/McGraw-Hill [Modified by EvS]
Additional Internet Sites
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http://www.sls.wau.nl/vlk/pef/cpsm/pairdale.htm
http://www.metalworld.com/a/view/0503.html
http://www.aimnet.com/~mssm/sy283files/tankersley_p.html
http://www.npr.gov/initiati/mfr/managebk.pdf
http://www.state.az.us/ospb/StratPlan.html
http://www.state.az.us/ospb/planning.html#Handbook
http://www.rba.co.uk/sources/index.htm
http://www.rba.co.uk/sources/stats.htm
http://www.carleton.ca/cifp/
http://lcweb2.loc.gov/frd/cs/
http://www02.imd.ch/documents/wcy/content/ranking.pdf
http://www.hbs.edu/projfinportal/countrydata.htm
http://www.eiu.com/ (No-cost registration required)
http://www.prsgroup.com/commonhtml/methods.html#_International_Countr
y_Risk Very good discussion of risk factors
http://rob.customer.netspace.net.au/Activities/worldecosurv/worldsurv.html
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-2
International Strategic
Planning
Strategic Planning:
The process of determining an
organization’s basic mission and
long-term objectives, and then
implementing a plan of action for
accomplishing this mission and
attaining these objectives
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-3
3 Central Management issues
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Organizational Structure
– Authority / Autonomy
– Reporting relationships
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Planning, Measurement, Control schemes
Standardization / Adaptation
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-4
The Growing Need For Strategic
Planning
Examples:
Ford Motors
Bertelsmann AG
Daimler-Chrysler
A giant German book
publisher
GE Capital Services
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-5
Approaches to Formulating and
Implementing Strategy
Economic Imperative
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Strategy based on Cost, differentiation, segmentation
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Political Imperative
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Country responsive strategies - protect local market niches
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Quality Imperative
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TQM - customer focus
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Administrative Co-ordination
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Strategic decisions based on individual situations
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Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-6
Strategic Predispositions
Ethnocentric allows the values and interests of the
parent company to guide the strategic decisions
Polycentric Tailored to suit the cultures of the
countries where the MNC operates
Regiocentric Leads a firm to try to blend
its own
interests with those of its subsidiaries on a regional
basis
Geocentric Tries to integrate a global systems
approach to decision making
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-7
Basic elements of strategic planning for international
management
Environmental
Scanning
Internal Resource
Analysis
Strategic Planning
GOALS
Implementation
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-8
Environmental Scanning
Attempts to provide
management with accurate
forecasts of trends that
relate to external changes in
geographic areas where the
firm is currently doing
business and/or considering
setting up operations.
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-9
Internal Resource Analysis
Helps the firm to evaluate its current managerial,
technical, material, and financial strengths and
weaknesses
A Key Success Factor (KSF) is a factor that is
necessary for a firm to compete effectively in a
market niche
(defined by the Industry / Market – not the firm!)
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-10
Strategy Implementation
Provides goods and services in accord
with a plan of action
1. The MNC must decide where to locate
operations
2. The MNC must carry out entry and
ownership strategies
3. Management must implement functional
strategies in areas such as marketing,
production, and finance
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-11
Location Considerations for
Implementation
The Country:
ex.) US company invests in Europe, Canada,
Japan, Mexico...
Specific Locale:
ex.) Somewhere easily accessible and
desirable
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-12
Ownership and Entry Considerations for
Implementation
Joint Venture
Export/Import
Franchising
Fully Owned
Subsidiary
Licensing
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-13
Cultural Differences
(Corning and Vitro Case)
 What
went wrong?
– Vitro’s sales approach less aggressive
– Cultural perceptions:
Mexicans thought Americans too forward
 Americans believed Mexicans wasted time being polite
 Americans perceived Mexicans unwilling to acknowledge
problems and faults
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– Operations / Processes (Speed)
Mexicans thought Americans moved too quickly
 Americans thought Vitro (Mexicans) moved too slowly
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– Clash of decision making styles
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-14
Cultural Differences
(Corning and Vitro Case)
 Was
the break-up handled properly?
 Were
the differences more pronounced
in National culture or organizational
culture?
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-15
“Go East, Young People, Go East” p. 276
1.
What type of entry and ownership?
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2.
JV in Taiwan or S. Korea, produce on-site?
How Would partners use 4-P’s?
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Must be determined on a country-by country basis
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3.
Existing product – demand forecast must be developed
Must assure reduction of trade (import) barriers
Must analyze price sensitivity
Promotion and place dictated by local conditions
Will Visions have problem coordinating production
globally?
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Inexperience of the firm?
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Obtaining best inputs from around the world and producing
components wherever most efficient.
Requires careful coordination
Irwin/McGraw-Hill [Modified by EvS]
Mgt 485-9-16